UAE to Become the First Arab State to Use Civilian Nuclear Power

Construction work started at a site close to the UAE border with Saudi Arabia last December, and the first reactor is scheduled to go online in 2017, despite expected delays. The UAE managed to convince potential supplier countries of its peaceful intentions with a pragmatic approach to nuclear energy and a shrewd negotiation strategy. The country sequenced its international negotiations smartly, offered far-reaching concessions, espoused transparence and gained endorsements from well-known nuclear experts. Crucially, the UAE commands an effective security apparatus able to contain eventual terror threats, enjoys a stable government and is awash with cash. Its transparent and open approach has been lauded as a new "gold standard" for nuclear energy acquisition.

This development is particularly remarkable given the UAE's location and history. The country's geographical proximity to the Islamic Republic of Iran, coupled with Dubai's importance as a trade hub evoked international concerns about the UAE's nuclear power ambitions. Abdul Qadeer Khan, the Pakistani nuclear engineer who had supplied several countries with nuclear technology, had used Dubai as an operational base up until 2004. Before 2007 trade with dual-use goods had gone virtually unregulated, and Dubai had repeatedly been accused of acting as a "sanctions buster" for Iran. Compounding the concerns were fears of terrorist attacks and the question of whether the spread of nuclear technology within the Arab world was to be welcomed.

Overcoming obstacles

The UAE concluded its first bilateral nuclear cooperation agreement with France in January 2008. France was an excellent starting point given parallel negotiations over a French military base in the UAE and the UAE's history of using nuclear technology as a foreign policy tool. This first agreement marked a breakthrough and signaled that the nuclear program would go forward - irrespective of whether other potential supplier states would agree to sign such agreements.

By the end of 2009 the UAE had signed cooperation agreements and Memoranda of Understanding with five governments: France, the US, South Korea, the UK and Japan. Despite their qualms about a nuclear program in the UAE, those states had a major incentive to sign nuclear cooperation agreements. Refusing to sign would have shut out their domestic nuclear industry from the bidding process, a tough call in times of economic strain and rising unemployment.

Convincing the US to enter into a nuclear agreement, called the "123 Agreement", was the hardest part. The "Dubai Ports World" controversy of 2006, in which US Congress had blocked the Dubai-owned enterprise from acquiring six ports in the US on national security grounds, was fresh in UAE policymaker's minds. To prevent a repeat, the UAE invested $1.6 million in a campaign to convince the US Congress of its peaceful intentions.

The UAE also committed itself to complete operational transparency, voluntarily adopted the Nuclear Suppliers Group (NSG) Export Guidelines and installed a "UAE International Advisory Group on Nuclear Energy" staffed with international nuclear energy luminaries and headed by Hans Blix. Additional endorsements from prominent non-proliferation figures such as Gareth Evans were consciously sought, giving the UAE's declarations additional credibility.

From ambitions to reality

In December 2009, no more than two years after the conclusion of the first bilateral nuclear cooperation agreement, the UAE government announced the outcome of the tender. The South Korean consortium headed by the Korea Electric Power Corporation (KEPCO) had won the $20 billion contract. The French and American bidders were thought to be frontrunners, but reportedly KEPCO's bid was $16 billion less than the one by AREVA (France). Moreover, South Korea's government had invested itself heavily in the bidding process and provided strong governmental support to KEPCO in anticipation of its first nuclear export.

Concerns remain about the country's ability to impose a stringent export control regime for dual-use technologies. At the moment there is little evidence that wide-scale implementation and enforcement of the export control law have gone into effect across the country. Each of the seven Emirates still has a separate customs agency, which complicates the implementation of the export control law.

Finding the necessary capable workforce will be another major challenge for the UAE. There is currently no indigenous workforce for the program; the necessary manpower has to be recruited from abroad. The government has announced highly ambitious "Emiratization" targets: It wants 60 percent of the workforce to be indigenous - a quota which will be difficult to meet even under the best of conditions.

Contentious precedent

Clearly there is increased interest in nuclear power generation in the Middle East. Jordan, Egypt and Saudi Arabia have all taken concrete steps toward the use of nuclear energy. Egypt planned to issue a tender for its nuclear program at the end of January, but the tender process has been postponed “until the stabilization of the situation in the country”. Its nuclear program is hence likely to experience severe delays. Saudi Arabia is however pushing forward its program, having inked another nuclear agreement end of February, this time with France. Jordan is also advancing its nuclear plans and is expected to solicit bids soon from nuclear energy companies to operate and invest in its first nuclear reactor.

The precedent set by the UAE was proclaimed by the US as the "minimum standard for future US agreements in the Middle East". However not all regional actors interested in nuclear power share this view. The renouncement of domestic enrichment - a right guaranteed by the NPT - proves particularly contentious. Jordan, having significant uranium reserves, voiced opposition. Khaled Toukan, Chairman of the Jordanian Atomic Energy Commission, said that such a concession was unacceptable to Jordan because "we are part of the NPT regime, so why should you relinquish your right under the NPT for nothing in return?"

The "gold standard" set by the UAE will certainly turn out to be the path of least resistance to nuclear energy. But it cannot be taken for granted that this will be enough of an incentive to convince the region's governments to follow suit. The US finds itself in a bind - if it presses too hard, it risks shutting out its domestic nuclear industry from lucrative deals. If it gives in, it reneges on its own declarations and misses out on this window of opportunity to reduce the proliferation risks of future Middle Eastern civilian nuclear programs.